Electricity bills are set to rise this month as Meralco increases its household rate by ₱0.28 per kilowatt-hour (kWh), adding around ₱57 to the monthly expenses of customers consuming 200 kWh.
Meralco confirmed the adjustment on Tuesday, citing a higher generation charge as the main driver of the increase. Ahead of the official announcement, the power distributor had already signaled that February rates would go up due to multiple cost factors.
Higher Generation Costs Drive Meralco Rate Hike
Joe Zaldarriaga, Meralco’s vice president and head of corporate communications, explained that the weaker Philippine peso has inflated costs from suppliers with dollar-denominated contracts.
“On top of this, we are expecting an increase in transmission charge component of the overall rate with the collection of the remaining 70 percent of the reserve market settlement fees incurred in March last year. To recall, the ERC (Energy Regulatory Commission) directed the recovery of these fees over a period of three months beginning the February billing,” he said.
Offsetting Factors and Regulatory Refunds
However, there is a slight offset. “We hope these upward pressures will be somehow tempered by the one-time refund of regulatory reset costs of distribution utilities similarly ordered by the ERC effective this month. This is equivalent to around 23 centavos per kilowatt-hour (kWh) for Meralco customers,” Zaldarriaga added.
Meralco will release its final February 2025 power rate adjustment within the week.
This increase follows a rate cut last month, when Meralco reduced electricity prices by ₱0.2189 per kWh due to lower generation charges. That adjustment saved consumers around ₱44 on their bills, lowering the overall electricity rate from ₱11.9617 per kWh to ₱11.7428 per kWh.
Wholesale Market Prices Drop, But Consumers Won’t Benefit Yet
Interestingly, the Independent Electricity Market Operator of the Philippines (IEMOP) reported a nationwide drop in electricity prices at the Wholesale Electricity Spot Market (WESM) as of January 25, 2025.
IEMOP data shows that the average price per kWh in WESM declined by 14.3 percent, from ₱3.45 in December 2024 to ₱2.96.
The decline was attributed to a 5.6 percent decrease in power demand, which dropped to 12,529 megawatts (MW) from 13,275 MW, while supply remained nearly stable, falling only 0.2 percent to 20,110 MW from 20,150 MW.
Despite WESM’s lower prices, Meralco’s long-term power supply agreements and other cost components prevent consumers from immediately benefiting from market price drops.
With currency fluctuations and added transmission charges at play, customers will need to brace for more expensive power bills this month.
